The International Monetary Fund (IMF) has reached a staff-level agreement with Barbados concerning the fifth reviews under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF). An IMF team, led by Michael Perks, visited Barbados from May 2 to May 8 to discuss the country's Economic Recovery and Transformation plan, known as BERT 2022. This plan is supported by both the EFF and RSF arrangements.
Michael Perks stated, "Following productive discussions, the IMF team and the Barbadian authorities reached a staff-level agreement on the completion of the fifth and final reviews of the EFF and the RSF arrangements with Barbados." He added that this agreement is pending approval by the IMF Executive Board in June. If approved, it will allow Barbados to draw approximately US$19 million under the EFF arrangement and about US$38 million under the RSF arrangement.
Barbados' economy showed strong growth in 2024, which continues into 2025. This growth is driven by sectors such as tourism, construction, and business services. Inflation has decreased due to lower global commodity prices. The external position has improved significantly with strengthened current accounts in 2024. International reserves have risen to nearly US$1.7 billion, equating to over seven months of import cover.
The economic outlook for Barbados remains positive but faces significant downside risks due to global uncertainties and vulnerabilities to external shocks. Real GDP is projected to grow by 2.7 percent in 2025.
Program performance remains robust as all quantitative performance criteria for the fifth review were met. The fiscal primary surplus reached 4.3 percent of GDP for FY2024/25 due to strong corporate tax revenues and controlled spending. For FY2025/26, a primary surplus of 4.4 percent of GDP is targeted.
Structural reforms are progressing well with support from technical assistance provided by international partners. Key achievements include meeting all structural benchmarks such as assessing human resource needs at customs, preparing a public-private partnership framework, and developing liquidity forecasting frameworks.
The government completed reform measures for climate integration into public financial management for the fifth RSF review. Initiatives include developing public investment project appraisal guidelines and deepening fiscal risk analysis.
Perks concluded by expressing gratitude: "The team would like to thank the authorities and other counterparts for their hospitality and constructive policy dialogue."